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Project Financing

1. Financing Criteria Selection of Sponsors Sponsors Stake Selection of Industry Group Selection of Projects Exposure Limits

2. Project Cycle

Project Identification Evaluation Appraisal Approval Implementation

3. Management Aspects

Credit Worthiness and Management Capabilities Sponsors Background, Educational Qualifications, Previous Experience (Technical and Managerial) Performance of Allied Concerns Credit Reports and Business Reputation Technical Manpower Availability and Training of Personnel Sound Internal Controls Organizational Chart Key Personnel

4. Market and Demand Aspects

Demand and Supply Analysis Determinants of Demand Market Considerations, Trends, Business Environment, and Market Segments Nature of Competition and Availability of Substitutes Consumption Growth Collection of Secondary Information and Conduct of Market Surveys Demand Forecasting; Quantitative Methods Time Series Causal Methods Demand and Supply Projections Marketing Strategy, Organizational Structure Pricing Distribution Promotion Service

5. Technical Aspects

Material Inputs and Utilities Manufacturing Process and Technology o Choice

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Product Mix

Acquisition Appropriate

Plant Capacity; Technological Requirements Investment Cost Resources of the Sponsors Government Policy

Location and Site

Proximity to Raw Materials and Markets Availability of Infrastructure

Construction Plan and Specifications;

Site Preparation and Development Building and Infrastructures Outdoor Works

Engineering and Construction Schedules;

Project Chart and Layouts Environmental Considerations Manpower

6. Implementation Scheduling Indicating

Various Implementation Stages Such as Negotiations and Contracting, Project Formulation, Actual Construction, Erection, Trial Runs and Commissioning

7. Financial Aspects

Capital Cost Estimates; Major Heads Such as: o Land and Site Development o Building and Civil Works o Engineering and Construction o Imported and Locally Manufactured Equipment o Erection and Installations o Foreign Technicians and Training Abroad o Preliminary and Capital Issue Expenses o Pre-operating Expenses o Furniture & Fixture o Contingencies o Working Capital at Startup o Product Cost, Overheads, Cost of Distributing and Selling Prices o Profitability o Projected Financial Statements o Cost Break-Even Analysis o Sensitivity Analysis o Pay Back Period o Average Weighted Cost of Capital o Internal Rate of Return o Job Creation

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Backward and Forward Linkages, and Externalities Development of Backward Areas Income Distribution, etc

8. Sources of Finance Such As

Sponsors and their Foreign Partners National / International Development Financial Institutions, Commercial Banks, Euro-Currency Markets Leasing Consortium / Syndicate Financing Supplier Credit Public Floatation

9. Documentation And Disbursement of Funds

Loan and Financing Agreements Guarantees Securities And Charge Creation Disbursement of Funds

10. Project Monitoring and Supervision

Need for Monitoring during Construction, Implementation and Operations; o Time Parameters o Cost Parameters o Physical Quantities and Qualities of Project o Organization and Staffing o M.I.S. Techniques of Project Supervision; o Personal Links o Plant Visits o Follow-up and Progress Reports o Appointment of Institutional Directors o Industrial Surveys

11. Deviations from Approved Project Parameters

Time Over-Runs Cost Over-Runs Irregularities by Sponsors Change in Duty Structure Role of Early Warning Signals